On the "BCash scam"

I found the web page http://www.bitcoincashscam.com/ the other day, and I'm a bit annoyed it has no comment fields. Here are my perspectives ...

What's the problem?

A hard-coded block size limit, introduced in 2010 to prevent rogue miners spamming the network with oversized blocks, sets the ceiling on the transaction flow the network can handle; due to adoption and usage we've frequently been hitting that capacity wall during the last two years, causing transactions to be unreliable, slow and expensive.

The article says:

We agree that this is an unpleasant situation which needs to be solved,

Actually, apparently not, there are many out there that thinks the current capacity limit is a holy constant that should never be changed, that Bitcoin shouldn't be used for payments, that neither high fees nor unreliability really is a problem, etc. From my point of view there is no rational arguments for not increasing the block size, still the maintainers of the Bitcoin Core github repository is vetoing any kind of increase. One of the points with free software is that one has the full right to fork the software if it gets hijacked like that, or if one disagrees with the direction.

The article complains on "spam attacks" - allegedly there are someone out there deliberately sending lots of transactions bogging down the network, just to prove a point. Guess what, if that's correct, they are proving a point - with the system working close to its capacity limit, it's not much resilient against such attacks - it's cheap to move the system from "frequently hitting the capacity ceiling" into being "constantly overloaded".

How would Bitcoin Cash cope with a spam attack? As I've touched in my other article on the Bitcoin fee markets, there are fundamental problems with how Bitcoin works when the blocks are full, and Bitcoin Cash does not solve this problem. Anyway, causing lasting harm to the network will be expensive. With the recommended fee being at 1 satoshi / byte, it would cost ~12 BCH/day to flood the network with enough spam to prevent legitimate transactions from being confirmed. However, miners can easily increase the limit from 8 MB to 32 MB, and the recommended fee can easily be increased from 1 satoshi/byte to 4 satoshis/byte - it would still be cheap to make transactions, but the cost of spamming will increase from 12 BCH/day to 48 BCH/day, which may be out of reach for an attacker.

With the recent adoption boom, there is no need to resort to conspiracy theories - there simply isn't enough capacity for all the new Bitcoin owners to withdraw their bitcoins from the exchange where they bought it and into their own wallet.

What is Bitcoin Cash (And why it is not to be called “BCash”)?

The article claims that Bitcoin Cash has stolen both the code and the brand name. From a legal and moral perspective, this is nonsense - nobody has any special rights on the code nor the brand name. When Satoshi retired, he appointed Gavin Andresen as the maintainer, Gavin invited in the current maintainers of the Bitcoin Core github repository, later they stripped Gavin from his commit rights.

The Bitcoin Cash movement consists of Bitcoin enthusiasts who had visions for Bitcoin. From their perspective, it has always been obvious that the current capacity limit was a temporary, arbitrary constant meant to be lifted or removed when needed. By vetoing any suggestion to increase the block size limit, the current maintainers of the Bitcoin Core github repository has efficiently stolen the Bitcoin dream. From their perspective, Bitcoin Cash is the real original Bitcoin, the Bitcoin as it was meant to be, and with a continuous block chain stretching back to 2010.

At the 1st of August, SegWit was activated on the Bitcoin chain. SegWit adds considerable amounts of complexity to the Bitcoin protocol as well as the Bitcoin Core software project. The purpose of SegWit is to work around some problems with the Bitcoin protocol while still being backwards compatible - the block size limit being one of those problems. Most of those problems are already fully solved in the Bitcoin Cash fork. SegWit is also not supported by Bitcoin Unlimited, Bitcoin Classic, Bitcoin XT and some other software forks. Some of the Bitcoin Cash supporters will claim that with the introduction of SegWit, Bitcoin finally morphed into something else than Bitcoin, and hence should be named Segwitcoin rather than Bitcoin.

The "smallblock movement" has been running a big campaign to promote the word "BCash", stripping out the "Bitcoin" part of "Bitcoin Cash". I think that any altcoins should have some unique value proposition (or GTFO). As compared to the other altcoins, BItcoin Cash doesn't have any other value proposition than that it is Bitcoin. Take away Bitcoin, and it's in the same league as Dogecoin or Litecoin, basically no value proposition at all. Hence, for any strong supporter of Bitcoin Cash, leaving out the "itcoin"-part of the name is one of the worst thing one can do, it's utterly disrespectful.

Resource utilization

I'm going into full digression mode now, but I think it's all relevant to Bitcoin nevertheless ...

The article says:

[Bitcoin Cash] “genius” solution to the problem of full blocks is: Making the blocks bigger. That´s about as smart as buying more and more harddrives instead of using some compression for files, like zip, mp3, mp4 or jpeg. If someone would sell that idea to you, wouldn´t that sound kind of stupid?

Yes it does. Why? Because it is.

I'm working as a system administrator, one of the things I'm getting paid for is to add more disk to systems before the disks go full. Yes, we look through the contents of the disk, we clean up, delete old stuff, add compression or recommend the customer to do those things, but in the end of the day, if I would let disks go full because "the customer can still compress some files after all, we shouldn't need to add more disk here", I probably wouldn't keep my job for very long.

Same with most resources. If a service becomes popular the traffic will grow, and often even with constant load the database volume will grow. We may need to add more CPU, more memory, or even more servers to keep things running smoothly. Quite often there are limits. There may not be room for more CPUs or more memory in the physical server, there may not be room for more servers in the rack, it would be too expensive to add resources, we may increase from 8 to 16 servers, but it only adds some few percent to the amount of traffic the systems can handle, etc.

Then software optimizations come in, there are always possibilities for doing things smarter, maybe some indexes are missing from the database, maybe we can add some caching. Sometimes the effect may be extreme; the most popular newspaper in Norway could reduce their resource usage from 12 to 1 server by introducing Varnish.

The article promotes a narrative that adding resources is stupid, while software optimizations are good. Yes, software optimizations are jolly good, but often adding more hardware may be faster. System running out of memory? Then we add more memory before it becomes a problem AND we help the developers to find ways to reduce the memory consumption.

In my opinion, Bitcoin can be compared with a small virtual machine running some service. In the short and medium term, the VM can easily be upgraded with more resources. In the long term, perhaps just adding more and more resources won't work very well, probably we should find some smarter ways to scale the system. Still, already in 2015 it was totally irresponsible not to upgrade the resources, deliberately giving users a bad user experience.

To be more specific: Perhaps Lightning will work just fine for coffee-sized purchases, but while waiting for it, we need to increase the block size limit. Perhaps sidechains also can help uncongesting the network, but until it's proven and adopted technology, we need to increase the block size limit. Even though most bitcoiners are euphoric on the current market price, the usage problems and high fees most probably have had a big unseen cost, people giving up on Bitcoin, merchants giving up on Bitcoin, bigger merchants considering Bitcoin but understanding the capacity limit would be an issue already several years ago, etc.

So, where are the benefits of Bitcoin Cash?

Bcash makes transactions slightly faster and cheaper in the short term (...) that´s it.

It's a bit misguided to say that transactions confirm faster. The block mining interval is still ~10 minutes, it's still a stochastic process, the interval between blocks follows an exponential probability distribution, sometimes a single confirmation may take hours. Pay sufficient fees, and a bitcoin transaction will confirm just as fast as a Bitcoin Cash transaction. It's also wrong to claim this is the only benefit, here are some more:

• Unconfirmed transactions are generally to be trusted, so merchants can accept them with a very low risk.
• Transaction costs are really insignificant, even when doing smaller payments.
• The risk of getting a transaction stuck for days, not even knowing if it ever will go through ... is virtually non-existent in Bitcoin Cash.
• Bitcoin Cash works.
• The quadratic hashing problem has been solved - for all transactions, while in Bitcoin it's just solved for the transactions coming from Segwit adresses.
• Faster difficulty adjustments - this is a very good thing, to prevent hash rate oscillation as well as to prevent a spiraling coin death if coin value falls so much it becomes unprofitable to mine at the difficulty level.

The article lists up 12 "cons" for Bitcoin Cash; the two first ones that it requires more resources for the full nodes. Actually, at the moment I believe there is less traffic on Bitcoin Cash than on Bitcoin. Yes, in theory the full nodes may need to handle (and store) eight times as much traffic - possibly even more, as the 8 MB limit is a soft limit. But does it matter? For me, running a full node for Bitcoin Cash would be a much smaller cost than what I'm currently paying in transaction fees! Further, I don't need my own full node.

Bcash is controlled by people who are in it just for their short term profit

This is speculation. One can also wonder what the top core developers are really after ... at least it seems pretty obvious that maintaining a healthy Bitcoin ecosystem is not on the top of their priority list.

Bcash doesn´t have a developer team with years of experience in maintaining a 100 billion $ financial network.

This is ad-hominem / argumentum ad verecundiam. If the current Bitcoin developers are irreplaceable, then I'd say the likely reason for this is that the Bitcoin Core code is too rotten and complex to be understood by outsiders. In this case, my best advice is to pick an altcoin that is not based on a fork of the Bitcoin Core code.

Bcash will be way more centralized as running a full Bcash node is more expensive in terms of hardware and traffic costs than running a full Bitcoin node. Therefore, less people can afford to run a full node.

The centralization risk goes both ways; I think the current capacity limit is a huge centralization risk i.e. as people would rather keep their Bitcoins on the exchanges instead of trying to move them into their own wallets. Not to forget that it's up to the maintainers of the github repo to define what a Bitcoin is - that's centralization to the extreme.

Bcash has no infrastructure and no support. Bitcoin has thousands of websites, merchants, casinos which support it and a network effekt of millions of people who use Bitcoin since years.

The Bitcoin Cash ecosystem is growing every day. At the other hand, Bitcoin merchant support is dropping for every day, as Bitcoin has become pretty unusable for the payments usecase.

Bitcoin is running for almost 9 years without interruption, Bcash is new and untested

Don't forget that Bitcoin Cash is a continuation of Bitcoin, just without the capacity problems. The Segwitcoin is new and untested, Bitcoin Cash has been running for almost 9 years without interruption.

Bcash is as smart as buying more harddrives instead of using zip-, mp3- or jpeg compression in order to store more files on your computer.

See my rantings above - if Bitcoin was a centralized commercial service running on some server and the sysadmins would have denied adding more disk space claiming it's the developers responsibility to add better compression - then those sysadmins would have been fired.

Bcash is mainly supported by chinese miners and Craig Wright, a person who claimed to be Satoshi Nakamoto (the creator of Bitcoin) but he is a clear scam and the “evidence” he showed that he is Sathoshi is a clear fraud.

Here we go again with ad-hominems and conspiracy theories, it's really irrelevant.

Bcash is trying to steal the brand name of bitcoin to make itself sound more trustworthy. The “creators” of Bcash couldnt even think of a unique name for their coin, that´s why they are trying to steal the name Bitcoin. Bcash also doesn´t have its own logo, its just taking Bitcoin´s logo and rotating it a little. Pretty creative, eh?

The current Bitcoin Core github maintainers have stolen the heart and spirit of Bitcoin, and since Bitcoin Cash is a continuation of the Bitcoin project, the usage of Bitcoin brand and symbols are intentional.